Pinellas County Attorney Jim Bennett explains latest steps taken towards development on an interlocal agreement for a transit surtax should voters approve its use during a Nov. 4 referendum.

CLEARWATER – Pinellas County and Pinellas Suncoast Transit Authority are making progress toward a final interlocal agreement to govern distribution of revenue from a 1 percent Transit Surtax.

Officials want an agreement in place prior to the Nov. 4 referendum on the proposed Greenlight Pinellas plan. If voters approve the use of a 1 percent transit tax in place of the current funding method of ad valorem taxes, the increased revenue would fund improvements to public transportation systems, including bus service and a future light-rail system.

During an April 22 work session, County Attorney Jim Bennett said a number of high-level discussions had taken place to work on the interlocal.

“But, we’re still in the drafting stage,” he said.

Bennett explained that part of the challenge was creating a document that would last for the long term. The question is how much detail can be “contemplated” years in advance “not knowing what the future will bring,” he said.

In addition, there is the balancing act between board oversight of PSTA without micromanaging and coming to terms on the county’s reimbursement for cost of infrastructure changes.

“The tax has no duration unlike Penny for Pinellas,” Bennett said. “The project, especially rail, is very ambitious. It has many moving parts.”

He said to diffuse the possibility of micromanaging the agreement would contain “insertion points” for the county to become involved “if things don’t go as planned.”

Attorney Steve Miller, who is one of several working on the interlocal, explained a bullet-point list of items contained in the latest draft agreement.

One point specifies that the county can withhold distribution of transit surtax proceeds and/or reduce the levy if PSTA ever decides to levy ad valorem taxes. The Greenlight plan calls for a “tax swap” – a transit surtax in place of the ad valorem tax – not double taxation.

A second point would allow PSTA to pledge surtax proceeds to secure any debt or other obligations incurred by PSTA for Greenlight, such as grants. Another requires discussion on the reduction and/or termination of the surtax when certain defined events occur. The agreement requires the county’s consent before PSTA can begin certain defined activities.

A list of events that would trigger “insertion points” when the county and PSTA would come together to solve problems is included. If the two sides can’t work it out, an independent financial and transit consultant could be required to mediate.

The interlocal includes steps to take if a hurricane or other event severely damages the transit system. It includes a date certain, still to be agreed on, where a discussion would be instigated about potential changes to the tax, such as reducing the amount. It is still uncertain whether a reduction or elimination of the tax would require another referendum.

Miller said PSTA would be required to develop a debt policy and investment policy to be approved by the county. Any substantial change to the plan also would require approval.

Work is ongoing to find the best way to reimburse the county for costs from support of the Greenlight plan. One idea is for PSTA to fund one county employee. Another is for PSTA to pay fees and associated costs.

“We’re still morphing on a fair amount,” Miller said.

Acting County Administrator Mark Woodard said he didn’t think using a dedicated employee was the “right path.”

“We should handle this like any other massive construction project using the existing fee schedule,” he said. “If there is not one (fee), we would develop one for approval.”

Bennett said the county was preparing a list of its infrastructure assets that could be involved in transit projects. He said the “transit penny” should pay for expenses to changes with those assets.

Municipalities would need to work out their own agreement for reimbursement. Commissioner Susan Latvala said not all would require an interlocal. They only would be needed in areas where there is a construction project or right of way is needed, she said.

The agreement sets a schedule of critical milestones for the plan, Miller said.

“If they (PSTA) don’t meet a milestone they would come to the county to discuss and amend, if necessary, the schedule,” he said. “If a milestone is missed, it could be a sign of a bigger problem.”

“I feel very optimistic about everything and we will have an agreement by May 20,” said PSTA CEO Brad Miller, who is no relation to attorney Steve Miller. “This is an incredibly strong interlocal agreement.”

The final agreement is expected to be on the May 20 commission agenda.

He said it includes very strong accountability for Greenlight Pinellas plan while doing no harm to PSTA’s ability to implement the plan.